Unemployment insurance creates jobs!

Representative Nancy Pelosi (D. Ca.) made that statement several months ago. Now, Presidential Press Secretary, Jay Carney, in a recent press conference, is jumping on the same band wagon.   The theory goes that if someone who is unemployed receives a payment from the government, they will spend it, thus boosting the economy and creating jobs.  Let’s analyze that.

Employers pay a tax to the government, known as FUTA, to “pay for” unemployment insurance.  It is a percentage of their total payroll.  And, for the purpose of this exercise, we will assume that the employer pays $.05.  Let’s call the employer “A”. 

“B” will be the person receiving unemployment insurance, and “B” will receive $1.00.

The missing $.95 between what “A” pays to the government , and what “B” receives from the government must be paid by “C”.  “C” is the taxpayer.

In my example, “A” and “C” collectively have lost $1.00 in tax payments, and “B” has received $1.00 in unemployment insurance.

Perhaps Ms. Pelosi or Mr. Carney could explain why jobs are created when “B” spends that dollar, as opposed to “A” and “C” collectively.

Isn’t it the same $1.00 no matter who is spending it?


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The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. Common Man on August 12, 2011 at 1:11 am

    It seems all the dollar buys is votes for re-election.

  2. Tim-in-Alabama on August 12, 2011 at 7:16 am

    I’d like to see Jay Blarney collecting unemployment and creating jobs very soon.

  3. winnie888 on August 12, 2011 at 7:36 am

    The only jobs my unemployment created had to be at the grocery store (& I’m pretty sure that didn’t happen, because they were never hiring).? What little I received was spent on ridiculously priced food and even more ridiculously priced gas.? There is no way possible that Pelosi & Carney? are living in the same universe that we are.

    • Murphy on August 12, 2011 at 12:11 pm

      Oh they live in the same universe. It’s just that they part and parcel of the inner workings of the Obamanation and refuse to see the truth of the lies.

  4. ricbee on August 13, 2011 at 12:17 am

    ?Unemployment is now being taxed,which means they will get back most of what they gave me. DRAT! I hate when that happens.

  5. Judy on August 13, 2011 at 7:02 am

    I am stunned that Ms. Pelosi has been able to get as far in her career as she has.
    America….what are you thinking….. are you listening to the people who are in control of our lives….and the Dems say the Tea Party are a bunch of nuts.

    Love you Jim and?Sound off ?Sister…you both rock the system!!!!!
    You need to go on national TV and show the other talking heads what is REALLY going on!

  6. crystal4 on August 13, 2011 at 7:24 am

    Ok.. just what I thought-people here collecting. The righties all decrying government programs but are first in line to get theirs.

    • GdavidH on August 14, 2011 at 9:13 pm

      I was trying to stay away because my comments were being removed. ( why? I don’t know.) But seriously Crystal444444444444444 Do you read what Soros money is telling you what to comment? ?That’s got to be the biggest lie I have ever seen on this blog.

      You have lost the ability to win with truth and you come here to spout your nonsense????? Do you not see how alone you are?

  7. Lynn on August 13, 2011 at 7:30 am

    Crystal you are so far off, I can’t even comprehend your reasoning. There is no one in a leadership position in the entire Democrat Party who has a clue about economics or Logic.? ‘Nuff said.

  8. winnie888 on August 13, 2011 at 8:23 am

    First in line, Crystal?? Hardly.? This was the first time in my life that I was unemployed & I’ve been working since I was 15 years old.? & no, I’m not giving away my age.? For years, my husband and I were in the 33+% tax bracket & we paid heavily in state & federal taxes.? I’ve not squandered my time unemployed–I’ve gone back to school & worked my a** off to get into one of the only fields where there are still actually jobs (medical).? For the record, I had no problem being employed under:? BushI, both Clinton terms, both Bush2 terms.? Funny how the jobs disappeared under Obama.

  9. Political Entropy on August 13, 2011 at 7:37 pm

    There should be a higher-education course on government math, and this should be the first lesson.

  10. JollyRoger on August 14, 2011 at 12:52 am

    Obama promises to cut deficit in half by 2012!? If I’d heard this, I might have voted for the lying bastid!? http://www.youtube.com/watch?v=jyrlMr0Bedo&feature=related

  11. sammy22 on August 15, 2011 at 11:50 am

    It’s simple: neither A nor C buy anything w/ that $1.00


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